Key Takeaways AFRM reports 34% revenue growth and 42% GMV gains driven by major merchant integrations and Affirm Card.AFRM expands its ecosystem to 24.1M consumers and 419,000 merchants while enhancing AI-powered underwriting.MA posts 17% Q3 revenue growth supported by higher volumes, cross-border strength and value-added services.The payments landscape is experiencing a significant transformation as Buy Now, Pay Later (BNPL) emerges as a popular financing choice. What used to be a niche choice at checkout ...

Key Takeaways Affirm trades at premium multiples even as it captures strong transaction and merchant growth.Repeat customers drove 96% of transactions, while active merchants rose 30% to 419,000.Affirm Card expansion and new markets supported rising users and 52.2% transaction growth.Affirm Holdings, Inc. (AFRM) continues to behave like a market favorite, but its valuation suggests investors are pricing in an almost flawless future. The stock trades at a forward 12-month price-to-sales (P/S) multiple of 5.1 ...

Core Insights - Affirm Holdings, Inc.'s Affirm Card is a significant growth driver, with management referring to it as a "favorite child" and noting its accelerating market penetration [1][9] - In Q1 of fiscal 2026, Direct-to-Consumer GMV rose 53% to $3.2 billion, while Affirm Card GMV increased 135% to $1.4 billion, driven by successful cash-flow underwriting [1][9] Growth Strategy - The cash-flow underwriting approach is particularly beneficial for younger consumers, such as millennials and Gen Z, who typically have limited credit histories, allowing for more approvals without entering riskier credit tiers [2] - Affirm has not engaged in external marketing for the card; growth has primarily stemmed from existing users, with plans to gradually expand eligibility as underwriting confidence improves [3] Performance Metrics - Early behavioral data indicates strong discretionary spending, with the card starting new cohorts at higher baselines; 0% GMV on the card increased by 158% [4] - Affirm aims for 10 million active cards and approximately $7,500 in annual discretionary spend per card, which are considered achievable targets [4] Competitive Landscape - Competitors like PayPal and Block are also expanding their BNPL offerings; PayPal's total payment volume grew 8% to $458.1 billion, while Block's BNPL GMV reached $9.7 billion, a 17% year-over-year increase [5][6] Financial Performance - Affirm's shares have increased by 11.9% year to date, outperforming the broader industry but lagging behind the S&P 500 Index [7] - The forward price-to-sales ratio for Affirm is 5.10X, above the industry average of 4.79X, with a Zacks Consensus Estimate indicating a 566.7% year-over-year earnings surge for fiscal 2026 [10][11]

Core Insights - The CEO of Affirm, Max Levchin, believes that AI and humanoid robots will serve as tools to enhance human productivity rather than replace jobs [1][3] - The Buy Now, Pay Later (BNPL) market is experiencing significant growth, with 15% of Americans using BNPL services in 2024, and Affirm's stock has increased by 25% in 2025 [2] - Affirm has reported strong fiscal first-quarter results for 2026, with analysts maintaining a positive outlook on the company's growth and stock performance [4][5] Company Performance - Affirm's recent fiscal first-quarter 2026 results were solid, leading to bullish analyst ratings, including a Buy rating from Goldman Sachs with a price target of $94 [4] - JPMorgan has rated Affirm as Overweight, projecting premium volume growth exceeding 20% and expanding operating margins due to increased penetration at platform partners like Shopify, Amazon, and Apple Pay [5] Industry Trends - The sentiment around AI in the workforce is mixed, with a survey indicating that 79% of respondents feel AI has impacted their roles, reflecting concerns about job displacement [3] - Levchin emphasizes that AI will enhance human intelligence and decision-making capabilities, suggesting a future where humans and AI collaborate effectively [6]

Core Insights - Affirm Holdings, Inc. (AFRM) shares increased by 15.4% following the release of its first-quarter fiscal 2026 results, driven by strong growth in Gross Merchandise Value (GMV), transaction volumes, active merchants, and card network revenues, although offset by high expenses and rising credit loss provisions [1] Financial Performance - Affirm reported Q1 fiscal 2026 earnings per share (EPS) of 23 cents, exceeding the Zacks Consensus Estimate of 11 cents and improving from a loss of 31 cents per share in the prior year [2][9] - Total revenues rose by 33.6% year over year to $933.3 million, surpassing management's expectations of $855-$885 million and beating the consensus mark by 5.5% [2] - GMV reached $10.8 billion, a 42% increase year over year, exceeding management's expected range but falling short of the Zacks Consensus Estimate of $13.1 billion [3][9] - Total transactions increased by 52.2% year over year to 41.4 million, driven by repeat customer transactions, although it missed the consensus mark of 44.2 million [4] Revenue Breakdown - Servicing income grew by 53% year over year to $39.7 million, missing the consensus mark of $40.3 million [4] - Interest income increased by 20% year over year to $454.1 million, falling short of the Zacks Consensus Estimate of $481.7 million [4] - Merchant network revenues improved by 36.2% year over year to $251.1 million, missing the consensus mark of $304.8 million [5] - Card network revenues rose by 46% year over year to $69.3 million, attributed to higher usage of Affirm Card and virtual cards, but also missed the consensus mark of $81 million [5] Expense and Profitability Metrics - Total operating expenses increased by 4.6% year over year to $869.7 million, driven by higher costs in various areas including loan purchase commitments and technology expenses [6] - Provision for credit losses rose by 1.8% year over year to $162.8 million [6] - Adjusted operating income surged by 103.6% year over year to $264 million, with an adjusted operating margin improving by 970 basis points to 28.3%, surpassing management's estimated range of 23-25% [7] Financial Position - As of September 30, 2025, Affirm had cash and cash equivalents of $1.4 billion, a 5.5% increase from the end of fiscal 2025 [8] - Total assets increased to $11.5 billion from $11.2 billion at the end of fiscal 2025 [8] - Funding debt rose by 9.6% to $1.8 billion compared to June 30, 2025 [8] - Total stockholders' equity increased to $3.3 billion from $3.1 billion at the end of fiscal 2025 [10] Future Guidance - For Q2 fiscal 2026, Affirm forecasts GMV in the range of $13-$13.3 billion and revenues between $1.03-$1.06 billion, with an expected adjusted operating margin of 28-30% [11] - For the full fiscal year 2026, management anticipates GMV to exceed $47.5 billion, up from a previous estimate of over $46 billion, with revenues expected to be 8.4% of GMV [12]

Market Overview - The CE 100 Index decreased by 3.5% over the week, with only the Banking segment and the Be Well pillar showing a slight increase of 0.5% [1] - The tech-heavy Nasdaq fell by 3.3%, primarily affecting companies leveraging artificial intelligence (AI) for growth, including major players like Microsoft and Meta, which both dropped over 4% [2] Index Performance - The 5-day performance for major indices showed CE 100 down 3.45%, Nasdaq down 3.29%, S&P 500 down 1.80%, and Dow down 1.27% [3] - Year-to-date (YTD) performance indicated CE 100 up 12.60%, Nasdaq up 19.00%, S&P 500 up 14.28%, and Dow up 10.37% [3] - Over the past year, CE 100 increased by 14.02%, while Nasdaq rose by 18.46%, S&P 500 by 12.45%, and Dow by 7.37% [3] Company Highlights - Pinterest's stock fell by 19.4%, despite CEO Bill Ready's assertion that the company is transforming into an "AI-powered visual-first shopping assistant," with AI integrated into various platform features [5][6] - Pinterest reported a 17% increase in third-quarter revenue to $1 billion, slightly surpassing Wall Street expectations, and a 12% rise in monthly active users to 600 million [7] - Cogent's shares plummeted over 41%, contributing to a 4% decline in the Enablers pillar, which includes several Big Tech companies [7] - Porch Group's Q3 revenue was reported at $115.1 million with an 82% gross margin, but shares dropped more than 30% during the week [8] - Affirm's gross merchandise volume (GMV) surged by 42% to $10.8 billion, with revenue increasing by 34% to $933 million, and active cardholders growing by 500,000 to 2.8 million [9][10] - FIS shares rose by 3.6%, reporting adjusted revenue of $2.7 billion, up 6.3%, with strong performance in banking and digital banking activities [11] - Sezzle achieved its first billion-dollar quarter in Q3, with GMV rising 58.7% year over year to $1 billion and total revenue climbing 67% to $116.8 million [13] - Uber Technologies reported a 22% year-over-year growth in total trips and a 21% increase in gross bookings, although shares fell by 5% [14]

Core Insights - Affirm Holdings reported strong fiscal Q1 earnings, with a profit of 23 cents per share, compared to a loss of 31 cents per share a year earlier, and an adjusted operating margin of 28.3%, up from 19% [2][3] - Revenue increased by 34% to $933 million, surpassing estimates of $883 million, while gross merchandise volume rose 42% to $10.8 billion, driven by the new debit card [3][4] - The company has seen a significant increase in active customers, reaching 24.1 million, up from 19.5 million a year ago [4] Financial Performance - Affirm's revenue growth was bolstered by the adoption of the Affirm Card, which now has 2.8 million users, representing about 11.6% of active consumers [4] - The company predicts fiscal Q2 revenue of $1.045 billion, aligning with market expectations [7] - Affirm's revenue mix is shifting towards more Buy Now, Pay Later (BNPL) plans with no interest, which generally have lower margins but attract higher credit quality consumers [8] Market Position and Competition - Affirm is a leading provider in the BNPL sector, competing with companies like Klarna, Sezzle, and PayPal [5][9] - The company has established partnerships with major retailers, including Amazon and Shopify, and has extended its relationship with Amazon for five more years [11] - A new partnership with Apple could significantly impact Affirm's growth in 2026, as BNPL plans are now available for in-store purchases at Apple stores [10] Stock Performance - Following the earnings report, Affirm's stock surged over 10% to $72.60, despite previous declines due to broader economic concerns [6] - The stock has an IBD Composite Rating of 81, indicating strong growth potential, and an Accumulation/Distribution Rating of B-minus, suggesting more funds are buying than selling [12]

Core Insights - Affirm experienced significant growth in 0% APR installment volumes, which increased by 74% as over 40,000 merchants offered interest-free options, enhancing value for both merchants and consumers [1][7] - The company reported a 42% growth in gross merchandise volume (GMV), reaching $10.8 billion, with nearly half of this growth attributed to direct merchant integrations and a third from direct-to-consumer channels [1][3] - Affirm's partnership with Amazon has been extended for an additional five years, solidifying a key relationship for future growth [2] Financial Performance - Gross merchandise volume rose 42% to $10.8 billion, while revenue increased by 34% to $933 million [3] - Direct-to-consumer GMV surged by 53% to $3.2 billion, driven by a 135% increase in Affirm Card volume to $1.4 billion [5] - Active consumers grew by 24% to 24.1 million, with transactions per active consumer rising from 5.1 to 6.1 [9] Market Expansion - The number of merchants increased by 30% to 419,000, indicating strong momentum in the market [8] - Wallet partners contributed over $7 billion in GMV, reflecting a nearly 70% increase [8] - Affirm's funding capacity rose to $26.6 billion, supporting over $60 billion in annual GMV, with projections for fiscal 2026 exceeding $47.5 billion [9] Consumer Insights - Affirm's consumer base is healthy, with low delinquency and default rates, tracking to less than 1% of GMV for recent Pay in 4 loans [8] - The company is focusing on expanding access to younger consumers and those typically overlooked by traditional credit systems [6]

Affirm (NasdaqGS:AFRM) Q1 2026 Earnings Call November 06, 2025 05:00 PM ET Company ParticipantsMax Levchin - Founder and CEOZane Keller - Head of Investor RelationsRob O'Hare - CFOMichael Linford - COOConference Call ParticipantsDan Perlin - AnalystKathy Chan - AnalystKyle Joseph - AnalystAdam Frisch - AnalystJames Faucette - AnalystHarry Bartlett - AnalystJeff Cantwell - AnalystMoshe Orenbuch - AnalystJamie Friedman - AnalystDan Dolev - AnalystNate Svensson - AnalystReggie Smith - AnalystRob Wildhack - Ana ...

Financial Data and Key Metrics Changes - The company reported a strong quarter with significant growth, maintaining a revenue-less transaction cost target of 4% for fiscal 2026 [23][24] - The operating margin guidance for the fiscal year has been increased to over 7.5%, up from the previous guidance of over 6% [73][75] Business Line Data and Key Metrics Changes - The growth in GMV (Gross Merchandise Volume) was driven by direct point-of-sale merchant integrations and direct-to-consumer channels, with half of the growth coming from the former and one-third from the latter [52][78] - The 0% APR loans have been highlighted as the fastest-growing loan product, indicating a strong consumer preference for this offering [78] Market Data and Key Metrics Changes - The company has successfully extended its partnership with Amazon for an additional five years, indicating strong market positioning and consumer trust [5][47] - The company is experiencing healthy consumer spending trends, particularly in sectors like sporting goods and outdoor products [27][29] Company Strategy and Development Direction - The company is focusing on expanding its relationships with payment service providers (PSPs) to enhance integration speed and market reach [16][34] - There is a strategic emphasis on cash flow underwriting to better serve younger consumers and those with limited credit histories, which is expected to drive growth [39][40] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the health of the consumer market, noting that delinquencies remain low even among less affluent consumers [29][30] - The company is committed to maintaining a long-term focus on growth and profitability, with a target range of 3-4% for revenue-less transaction costs in the future [23][103] Other Important Information - The company is actively exploring new verticals, such as services and elective medical, with a robust process for adapting underwriting models to new data [92][94] - The recent promotional event, referred to as "Zero Days," was successful in driving consumer engagement and merchant participation [60][101] Q&A Session Summary Question: Thoughts on the funding market and execution - Management highlighted their strong execution in the ABS market and the importance of asset performance in driving investor appetite [10][11] Question: PSP strategy and future expectations - Management emphasized the importance of PSP relationships for integration speed and market access, with ongoing efforts to expand these partnerships [15][16] Question: Trends in consumer spending and delinquency rates - Management noted that consumer spending remains healthy, with low delinquency rates observed even among government employees during economic challenges [27][29] Question: Insights on the Amazon partnership - The extension of the Amazon agreement was seen as a significant long-term commitment, reflecting mutual satisfaction with the service provided [47][48] Question: Operating margins and expense expectations - Management attributed the increase in operating margins to growth rather than cost-cutting, with a focus on revenue growth driving operating leverage [75][76] Question: Competitive environment and market positioning - Management indicated that the competitive landscape remains dynamic, with a focus on product quality and execution as key differentiators [106][108]